Challenge
A private equity firm and a real estate management company formed a joint venture to purchase a portfolio of nine, Class A suburban office buildings totaling almost one million square feet in a large metropolitan area. The two clients, which were operating out of different states, needed assistance to verify the seller’s stated financials. Allegro was engaged to perform financial due diligence on the office portfolio.
Solution
Allegro completed due diligence on the financial statements of all nine properties in less than one month. The analysis included confirmation of operating expenses and income, identification of financial issues related to the transaction, investigation of tenant relations, and validation of the seller’s existing Argus financial models. Allegro rebuilt a Net Operating Income model for each property and for the comprehensive portfolio to verify that the seller was accurately marketing the portfolio.
Allegro determined that the seller’s representation of the portfolio was financially correct. Allegro provided an analysis report to confirm all of the financial underwriting of the transaction. This analysis provided the client with the financial assurance and confidence needed to complete the purchase of the office building portfolio.
